ED seizes over Rs 8 crore from Chinese-owned education firm in Bengaluru
The ED had raided the firm’s office in Bengaluru in April and the probe revealed that the company was part of a complex web of entities having a controlling company in the Cayman Islands.
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During the investigation, it was ascertained that the company siphoned off Rs 82.72 crore to China and Hong Kong in the name of advertisement and marketing expenses on the instructions of its Chinese director Liu Can. (Representational/file) The Directorate of Enforcement (ED) on Friday said it seized Rs 8.26 crore from China-based Pigeon Education Technology India Private Limited under section 37A of the Foreign Exchange Management Act (FEMA), 1999.
According to the ED, the company provides online education services under the name Odaclass. The agency had in April raided the firm’s office in Bengaluru and a subsequent probe revealed that the company was part of a complex web of entities having a controlling company in the Cayman Islands.
The ED found that the firm was fully owned by Chinese nationals and that all its affairs, including financial decisions, were taken by individuals in that country. During the investigation, it was ascertained that the company siphoned off Rs 82.72 crore to China and Hong Kong in the name of advertisement and marketing expenses on the instructions of its Chinese director Liu Can. The firm could not produce any proof of receipt of service on its part or proof of any advertisement published against the said expenses.
Further, the director and accounts manager of the company has also admitted during investigation that the payments were made only on the instructions of Liu Kan. According to Vedanta Hamirwasia, the director of the company’s India arm, Liu Kan had told them that the said advertisements were published through Google and Facebook. However, no confirmation or invoice raised by these platforms has been submitted. Further investigation is under progress, the ED said in its release.
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